Tipped Employee Protection Act

The "Tipped Employee Protection Act" proposes to significantly revise the definition of a "tipped employee" under the Fair Labor Standards Act of 1938. It eliminates the previous criteria that an employee must be in an occupation customarily receiving tips and removes the specific $30 monthly tip threshold.

Under the amended definition, an individual qualifies as a tipped employee if their total earnings from tips, combined with the employer's direct cash wage, are equal to or greater than the federal minimum wage. This determination is made "without regard to the duties of the employee," thereby broadening the scope of who can be classified as tipped. Employers are also granted flexibility to determine the period over which this combined wage is calculated, choosing from options such as daily, weekly, bi-weekly, per pay period, or monthly.